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Confidence Tricks!

John Long

Business confidence is an ongoing story in the New Zealand media. There is a puzzling lack of it despite reasonably favourable metrics and even plenty of positive “boots on ground” experience. My contacts speak of a disappointing ‘lack of leadership’ in Wellington.

Originally denounced in the media as sulky behaviour by the business community, the Government has recently tried to reach out. While it’s good to see the effort being made it’s not likely to help much.

Appointing the CEO of Air New Zealand to lead the business liaison group will not likely be seen as representing the views of most of New Zealand’s business owners, who run small to medium enterprises. It just sends another mixed message to the business community about how much their views really matter to the Government.

RCG has worked in the Retail sector for over 28 years now. Corporates / chains and SMES / Independents have very different cultures and attitudes. Retail, and I suspect other SMEs can’t be ignored without consequences.

It’s a fact that around 90% of Retail / F + B (Food and Beverage) enterprises employ less than 20 people (that makes them an SME). These Owners take on the everyday risks of business to make an independent living, create jobs and make street fronts and town centres vibrant, all without the support of a head office in property, Finance, HR and so on. They know they are exposed to new Government regulations.

That’s why the 90-day employment trial is so sensitive to them. It’s another major risk, and a cost, for them to cope with.

And there’s another statistical fact that it doesn’t help this predicament. SMEs employ less than 25% of the total workers involved in this sector. The corporates are the biggest employers, they get the Government's attention.

For a Government that is sensitive to union views, big employers line up better with unions. Most SME owners instinctively understand this, and that’s part of why their confidence is low.

It appears you can’t trust the politicians to really care about the viewpoint of smaller businesses. If the SME contribution isn’t better valued then confidence isn’t going to improve.

Yet another relevant statistic is the private sector money invested in Retail and F+B assets. RCG estimates this at $32B. We haven’t calculated the annual reinvestment but it will be significant (new shop fitouts, stock, I.T, uniforms, property development...). If confidence remains flat then reinvestment decisions will be much slower as owners sit on their wallets and muddle through until some trust in the Government's leadership is earned. Do I need to spell out the consequences for the community?

The Best Design Awards are this Weekend


Brought to you by The Designers Institute of New Zealand, the Best Design Awards is an annual showcase of excellence in graphic, spatial, product, interactive and motion design. We are proud to have had Māori Television selected as a finalist in two categories, Ngā Aho and Workplace.

We look forward to the Awards evening on Saturday at the Viaducts Event Centre and wish all other finalists the ‘Best’ of luck!

In the Press

Local Media highlights from the past week...

How to fix racial inequality in urban design

In the first episode of The Good Citizen, a new podcast of interviews with exciting and innovative New Zealanders, Jeremy Hansen talks to Jade Kake about how the work of the Māori design movement can make life in Aotearoa better for all its citizens.

“The problem with subdivisions is that there are too many divisions.” Jade Kake is talking about an idyllic-sounding papakāinga housing development near Whangārei she’s designing, a place where kids will play together in shared outdoor spaces and neighbours will bond over get-togethers in the wharekai.

(Source: The SpinOff)


Employment law changes won't help business growth - CEO

Business leaders are accusing the government of failing to listen to their objections about proposed employment law changes.

A parliamentary select committee has reported back on the Employment Relations Amendment law which will now go before Parliament for its second reading.

(Source: Radio New Zealand)


NZ Initiative report suggests up to one dollar in three of NZ general government spending is wasteful, representing about 13% of GDP, or $20,000 per household annually

(Source: Interest)


NZ house prices most overvalued in world, behind only Hong Kong: report

New Zealand's house prices have been ranked the most overvalued in the developed world behind only Hong Kong.

The Kiwi housing market was also deemed to be the fifth most at-risk among OECD nations, according to an Oxford Economics report.

(Source: Herald)

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